SYDNEY (Reuters) - The first cyclone of the West Australia
storm season formed offshore on Friday, the government weather
service said, serving a reminder to oil firms and miners of the
potential for disruptions over the next four months.

Tropical cyclone Melanie developed in the ocean about 600
km (370 miles) north-west of the seaside community of Broome,
according to Australia's Bureau of Meteorology.

Melanie is the first storm of the November-to-April season
to form in Australia's 'cyclone alley', which is also home to
the world's biggest iron ore deposits and major oil and gas
fields. Normally the area sees about five storms each season.

The storm was rated at the lowest end of the five-step
intensity scale, Category 1, with wind speeds up to 88
kilometers per hour and gusts up to 125 km per hour, the bureau
said.

ADVERTISEMENT

Major miners including Rio Tinto Ltd, BHP Billiton Ltd/Plc
and Fortescue Metals Group Ltd, as well as oil firms like
Woodside Petroleum Ltd, are sometimes forced to halt production
briefly during the season.

"At this stage, we're monitoring developments very
closely," a spokesman for Rio said. "We take these storm
warnings very seriously."

During the last cyclone season, Fortescue was forced to
shoulder more than A$100 million ($87 million) in construction
cost overruns and shipment delays from its Pilbara iron ore
project after three storms smashed into its operations,
destroying work camps, flooding roads and killing two workers.

Woodside, Australia's second-largest oil producer, said it
would keep a close watch on the weather, though its offshore
oil and gas operations had so far been unaffected by bad
weather.

"We are making preparations in case there is a need for
evacuation but we haven't done that at this stage," said a
Woodside spokeswoman, Kirsten Stoney.

In March, a powerful cyclone forced oil companies,
including Santos and BHP to shut about 180,000 barrels a day of
production, half of Australia's output, for nearly a week.